M2

M2 is a headcount of money. It adds up the notes and coins in people's pockets, the balances in checking accounts, savings accounts, small time deposits and retail money market funds. Think of it as all the money that could be spent this week without much fuss.

Traders watch it because it hints at what a central bank is doing to the plumbing. When M2 balloons, as it did in the US in 2020, there is more money chasing the same goods, and inflation worries creep in. When it shrinks, the tap is being turned off. It is a slow, background number, not a day-trading signal.